A copyright dispute brought by four publishers against the Internet Archive came to a close earlier this month, following the Internet Archive’s unsuccessful appeal to U.S. Court of Appeals for the Second Circuit.

The Internet Archive (“the Archive”) is a non-profit organization known for its Wayback Machine, a repository of archived and timestamped webpages which many use to find removed or altered content online. At issue in this case was the Archive’s sharing policies with respect to its free digital multimedia distribution. These policies drew scrutiny well before the organization’s decision to launch the “National Emergency Library” or “NEL” in response to COVID-19 isolation measures. In essence, the NEL paradigm lifted the Archive’s typical restriction that concurrent digital lendees of a text could not exceed the number of physical copies the Archive held in storage. Four major publishers sued the Archive for copyright infringement and were granted summary judgment in the U.S. District Court for the Southern District of New York, defeating the Archive’s fair use defense. The Archive appealed.

The Second Circuit’s analysis fell solely on the question of whether the Archive’s implementation of what it called Controlled Digital Lending constituted fair use. While the Second Circuit affirmed the finding below that the fair use defense did not absolve the Archive from acts of alleged infringement, the appellate court’s analysis was not one sided, nor did it agree entirely with that of the district court. Notably, the appellate court disagreed with the district court’s rationale for finding that the purpose and character of the Archive’s use of the works commercial, as opposed to non-profit and educational. In the proceedings below, the Southern District pointed to the Archive’s donation buttons and book sale partnerships in deciding that the Archive monetizes its operation and therefore the purpose and character of the use of the works was commercial. The Second Circuit disagreed, stating that “[o]f course, [the Internet Archive] must solicit some funds to keep the lights on” and concluding that the Archive’s monetization was not commercial in nature. While the Second Circuit’s commerciality analysis did not save the Defendant here, it remains an important consideration for non-profit groups in fair use territory.

Another legal challenge from Universal Media Group looms over the Internet Archive. Non-profit organizations or other archivists may still keep the lights on in the Second Circuit, but should shine that light carefully, to avoid straying from the path of fair use.